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The Gold Plus Company manufactures medals for winners of athletic events and other contests. Its manufacturing plant has the capacity to produce 11,000 medals each
The Gold Plus Company manufactures medals for winners of athletic events and other contests. Its manufacturing plant has the capacity to produce 11,000 medals each month. Current production level and sales are 10,000 medals per month. The company normally charges RM150 per medal. Cost information for the current activity level is as follows: RM Direct materials 375,000 Direct manufacturing labor 135,000 Variable costs 350,000 Fixed manufacturing costs 300,000 Fixed marketing costs 275,000 Total costs 1.435,000 Gold Plus has just received a special one-time-only order for 1,000 medals at RM100 per medal. Accepting the special order will not incur 10% of variable costs. The cost information is the same as given in the preceding table. Required: (Show all calculations) a. On financial considerations alone Should Gold Plus accept this special order? (4 marks) b. Suppose plant capacity were only 10,500 medals instead of 11,000 medals each month. The special order must either be taken in full or be rejected completely. Should Gold Plus accept the special order? (4 marks) c. Quantitative and qualitative factors play a significant role in decision making process. Distinguish between quantitative and qualitative factors in decision making and give an example
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